MARKETING DEVOLOPMENT ASSISTANCE (M D A) &STATE TRADING CENTERS

MARKETING DEVOLOPMENT ASSISTANCE (MDA)

The government of India established the Market Development Fund (now known as Marketing Development Assistance ) in 1963, with a view to stimulate and diversify the export trade along with the development of marketing of India products and commodities abroad

PURPOSES OF MDAMarketing research , commodity research , area

survey and research.Export publicity and dissemination of information.Participation in trade fairs and exhibitions.Trade delegates and study teams.Establishment of offices and branches in country

and abroad.Grant in aid to export promotion councils and

other approved organizations for the development of exports and promotion of foreign trade.

Any other schemes that are intended for the development of exports

MDA IS PROVIDED FOR:-1.PRODUCT OR PROMOTION AND COMMODITY

DEVELOPMENT ; This provision under this head is for CCS(cash

compensatory support) ,for selected export products like engineering, chemicals, alloyed products. plastic goods, jute products, processed food items leather and leather goods..

2.GRANT IN AID TO EXPORT DEVELOPMENT AND MARKET DEVELOPMENT ORGANIZATIONS.

There are 19 export promotional councils to whom the grant in aid is being provided. how ever no grant is given to apparel export promotional councils and cotton textiles export promotion councils , but the foreign exchange needed for such export promotional activities are released through these councils

3.EXPORT CREDIT DEVELOPMENT This scheme is for subsidies to be

paid for the interest charges on export finance provided by banks. This scheme is administered by RBI

Other incentives & facilities.1.Tax concessions2.Technology and capital goods3.Relaxation of MRTP Act.4.Trade fairs and exhibitions5.Buyer seller meets6.Foreign travels.7.Research studies.8.Export training.9.Foreign exchange facilities.

10.Insurance risk.

11.Export awards.

12.Subsidies

13.Quality control and pre-shipment inspection.

STATE TRADING CENTERS

STATE TRADING.State trading refers to export and import of

goods by the government.In centralized economies, the entire foreign

trade is conducted directly by the government.In free enterprise countries, export and import

is entrusted to government departments.In a mixed economy, state participation in

foreign trade is mostly done through government departments or government trading organizations.

Scope of State trading is different in different countries

The state may establish monopoly by restricting the private sector

There is partial monopoly when private participation is limited to selected no. of items.

There is sole state monopoly when state control is extended over the whole trade and private participation is completely forbidden by the state.

Objectives of state trading.1.It improves terms of trade.

2.Regulating imports and exports

3.Source of revenue.

4.It affords protection.

State trading in IndiaState trading started in the year 1948 with

the abnormal increase in the price of East African cotton of which India was a bulk importer.

In 1956 the government started State Trading Corporation of India.

It was done partly because, importers to whom the licenses were given created artificial scarcity.

FUNCTIONS OF STC

1. To organize and undertake trade with state trading countries as well as other countries in commodities entrusted to the company for any such purpose by the union government from time to time and to undertake the purchase sale and transport of any such commodities in India or anywhere else in the world.

2. to undertake at the instance of the union government import and or internal distribution of any commodities in short supply with a view to establishing prices and rationalizing distribution.

3.to generally implement such special arrangements for imports exports internal trade and or distribution of particular commodities as the union government may specify in the public interest.

SUBSIDIARIES OF STC

1. Minerals and Metal Trading Corporation

2.Project and Equipment Corporation of India.

3.Export Credit Guarantee Corporation of India.

4.Spices Trading Corporation limited.

MINERALS AND METAL TRADING CORPORATION.(MMTC)Established in 1963.Important agency in export of ores , minerals

and metals.It penetrated Indian export market in Japan,

Korea , Singapore eastern Europe and other overseas market.

It is India’s largest international trading company and the first public sector undertaking to be awarded ‘the Golden Super Star’ status in the country

PROJECT & EQUIPMENT CORPORATION OF INDIAIt came into existence in 21st April 1971.In may 1990 it became an independent

corporation under ministry of commerce.It deals with export of textiles , machinery ,

project equipment , transportation equipment etc.

It takes effort in securing small and medium term industrial projects to overcome problems in credit terms.

EXPORT CREDIT GURANTEE CORPORATION OF INDIA LTDIt was known as Export Risk Insurance

Corporation Ltd estb.in 1957.Later it changed the name due to increased

operations.Objectives ;1. A range of insurance covers to the Indian

exporters against the risk of export proceeds due to commercial and political causes.

2. Guarantees to banks to provide loans to exporters in liberal terms.

Spices Trading Corporation ltd.Earlier known as Cardamom Trading

Corporation Ltd.Estbd. In 1982.It started functioning in new name on 1987.It became subsidiary of STC in 1999.Its main objective was to carry out domestic

and international trade in spices and related products.

CONCLUSIONThere are various assistance provided by the

government for export promotion and developing export market.

State trading houses are generally governments agency for carrying out both domestic and international trade.

It has a no. of subsidiaries.

REFERENCES….INTERNATIONAL TRADE AND FINANCIAL

ENVIRONMENT– M.K.BHAT.

INTERNATIONAL BUSINESS- FRANCIS CHERUNILAM.